Observations focused on the problems of an underdeveloped country, Venezuela, with some serendipity about the world (orchids, techs, science, investments, politics) at large. A famous Venezuelan, Juan Pablo Perez Alfonzo, referred to oil as the devil's excrement. For countries, easy wealth appears indeed to be the sure path to failure. Venezuela might be a clear example of that.

Archive for April 13th, 2007

Funny how fast things can change when you go from being
Government to owner. It was only September of last year when CANTV started
paying pensioned workers minimum salary to abide by a Court decision. Despite
this, President Chavez would regularly come on TV and threaten that if the
company did not pay the pensioned workers what the Court had ordered, he would
nationalize it. Essentially the workers were protesting, because they wanted
the company to pay more than just minimum salary as well as interest on the
back pay owed them since the new Constitution went into effect.

Well, CANTV paid them the minimum salary and what the Court
ordered, but the workers continued protesting and asking for more. Then Chavez
announced the nationalization of the company and the workers started to
complain also about the price they were getting for their shares. You see, the
CANTV workers paid over US$ 4 per share when the company went public, but the
tender for the shares is only for US$ 2.12, so they feel they did not do too
well in the deal.

Then day before yesterday, the Minister of transport and
Communications essentially
said that he did not have to deal with the company’s union as the pensioned
workers had accepted the minimum salary for their pensions. This led to a protest
yesterday by the pensioned workers who not only say the union is their only
representative, but also that they continue to demand higher pensions as well
as a higher price for their shares.

And then last night, Chavez himself fustigated
the union, saying that they wanted to destabilize the company from within.
Chavez claimed that these unions have been passive while the company was
private, but now that the Government was about to take it over, they were
starting to talk tough and blackmail the state.

How fast things change! These unions that were not tough are
the same ones that fought for years in the courts on the pensions to get the
decision that Chávez hailed so much in the last two years, but now that the
Government will become the owner wants to tone down. Moreover, CANTV’s unions
have fought the company at every step, obtaining a very generous collective
agreement. In fact, I find it remarkable that the workers have been so passive
on what they will get for their shares.

The workers have a spot on the Board of Directors, which
last year, when Mexican telecom magnate Carlos Slim offered US$ 21 per ADR (US$
3 per local share), paid Goldman Sachs to do a valuation of the company because
the Government’s representative on the Board, did not think it was high enough.
The valuation exists, but it has been kept secret as the Chávez Government
offered even less than Slim, at US$ 17.7 per ADR (US$ 2.51 per ordinary share
before a dividend).

Thus, much like in every other Government enterprise in the
country, the CANTV union has now become the enemy to the leader of the XXIst.
Century Socialism, since unions and workers rights are not a priority of this
novel tropical version of socialism that Chavez purportedly is proposing. He
talks about “social ownership”, but this apparently means the state owns and
decides everything in classical Soviet style.

Because what the defenders of the revolution never tell
people is how worker rights have taken a backseat in the Chavista revolution.
Most collective bargaining agreements are at least two and three years behind,
simply because the Government refuses to discuss them and there are no legal
instances that workers can appeal to because the Government controls them too.
In the case of Electricidad de Caracas, the company had negotiated an agreement
with the workers and was ready to sign it, but the Government asked management
not to sign it because the Government was taking the company over. The workers
have protested, as they fear that they will not get their agreement once PDVSA
becomes the owner of Electricidad de Caracas.

Thus, Chavez pulled another “Ethanol Shift”, switching sides
on an issue at his convenience, simply because his old position is no longer
aligned with his own personal power grabbing interests.